Hoping for guidance

[Tkydon]

OK, thanks for the replies. Next question re the tsumitate part: when I set up a standing order each month, will the money just go into my a/c and wait for me to buy, or will I have to choose funds to apportion the money between in advance, like iDeCo? If the latter, is there 'switching' to change allocation like iDeCo?

There is not any 'Switching' like iDECO.

When you buy for X Yen - When you decide to sell, the proceeds (how ever much - hopefully X + Gain) get deposited in your account tax free, and X Yen gets credited back to your Lifetime Allowance for the future.

If you still have allowance in the same Tax Year, for either the Tsumitate Part or the Growth Part, you can reinvest the proceeds in NISA in the same year using the unused allowance.

If you have maxed out your allowance for the year on both Tsumitate Part and Growth Part, you would have to wait until the next Tax Year to reinvest the proceeds when you have available annual allowance.

[banders]

Thanks for the reply, but I was asking something far more basic.

Since no one in my family uses a tsumitate NISA, I have no idea how they work. The normal NISA I can just pay money in when I want. With the existing tsumitate NISA (and I assume the new part will work the same), when your money gets credited to SBI or wherever by standing order each month, does the money just sit in the SBI a/c and wait for you to buy index/stocks, or do you have to say in advance what you want to buy each month with your standing orders (like with iDeCo)? If the latter, I was wondering how to rebalance.

[beanhead]

Thanks for the reply, but I was asking something far more basic.
does the money just sit in the SBI a/c and wait for you to buy index/stocks, or do you have to say in advance what you want to buy each month with your standing orders (like with iDeCo)? If the latter, I was wondering how to rebalance.

Bold part: No. A tsumitate order is for a specific fund. So instead of placing a spot order you contract to buy the fund every month.
Just like iDeCo, as you said.

Rebalance? One way to do this is with new funds. So if the stocks rise over time and your equity value gets 'too high', change your allocation to buy more of a bond fund. If that is what you are planning on.
There is no switching in NISA.
NISA also allows you to sell funds but you will not be able to fill up that part of your allocation immediately. From the next calendar year, it seems.

(Just saw JohKun's response. Basically, what they said)

[banders]

Money needs to be invested.
When setting up the NISA, you need to choose the funds and the allocation.
You can change the allocation for future payments.
You cannot switch, you’d need to sell. If you have allocation left you can invest in sth else.

Thanks (beanhead, too), I think I get it (at last). So this is correct?: my stocks are way over the 70% I planned. So when I set up the new NISA I should allocate 100% to bonds, then when they're back in line switch allocation to 70/30. Or extra money I put in the growth part can do that, I guess.

[beanhead]

Thanks (beanhead, too), I think I get it (at last). So this is correct?: my stocks are way over the 70% I planned. So when I set up the new NISA I should allocate 100% to bonds, then when they're back in line switch allocation to 70/30. Or extra money I put in the growth part can do that, I guess.

Sounds like a plan.

The bond growth will presumably be much lower than the stock growth, so there is the argument that you may be 'wasting' the tax-free benefit of NISA by putting bonds in the NISA account.
Keeping bonds, or cash, outside of NISA may be a better strategy, if that is possible.

[mikele3]

When you buy for X Yen - When you decide to sell, the proceeds (how ever much - hopefully X + Gain) get deposited in your account tax free, and X Yen gets credited back to your Lifetime Allowance for the future.

If you still have allowance in the same Tax Year, for either the Tsumitate Part or the Growth Part, you can reinvest the proceeds in NISA in the same year using the unused allowance.

If you have maxed out your allowance for the year on both Tsumitate Part and Growth Part, you would have to wait until the next Tax Year to reinvest the proceeds when you have available annual allowance.

Do I understand this correctly:

Max contribution 3.6 Millions a year (1.2 Millions tsumitate e 2.4 Millions extra in one or as many installments as desired)
Max 18 Millions total allowed in a NISA account

... when you sell products in your NISA, you get back an allowance equal to the initial purchase price and the possibility to buy something else back into NISA ?!?!
?

If true, that is amazing, I thought you could never sell until ready to give up ... unforgiving, but not unthinkable.

I mean... you can basically trade using NISA? and not only invest for the longest term?

[Tsumitate Wrestler]

When you buy for X Yen - When you decide to sell, the proceeds (how ever much - hopefully X + Gain) get deposited in your account tax free, and X Yen gets credited back to your Lifetime Allowance for the future.

If you still have allowance in the same Tax Year, for either the Tsumitate Part or the Growth Part, you can reinvest the proceeds in NISA in the same year using the unused allowance.

If you have maxed out your allowance for the year on both Tsumitate Part and Growth Part, you would have to wait until the next Tax Year to reinvest the proceeds when you have available annual allowance.

Do I understand this correctly:

Max contribution 3.6 Millions a year (1.2 Millions tsumitate e 2.4 Millions extra in one or as many installments as desired)
Max 18 Millions total allowed in a NISA account

... when you sell products in your NISA, you get back an allowance equal to the initial purchase price and the possibility to buy something else back into NISA ?!?!
?

If true, that is amazing, I thought you could never sell until ready to give up ... unforgiving, but not unthinkable.

I mean... you can basically trade using NISA? and not only invest for the longest term?

You can only contribute 3.6 mil max per year. So if you sell two years' worth (7.2 mil {measured by original contribution, not value}) it will take you two years to earn back that space. So...not for day trading.

[mikele3]

You can only contribute 3.6 mil max per year. So if you sell two years' worth (7.2 mil {measured by original contribution, not value}) it will take you two years to earn back that space. So...not for day trading.

definitively not day trading, but I am pleased by the idea that one could sell a position and be able to buy back something else into NISA... I never realized that.

[RetireJapan]

definitively not day trading, but I am pleased by the idea that one could sell a position and be able to buy back something else into NISA... I never realized that.

It hasn't been possible so far. This is a new function of the new NISA account. I would prefer to have no lifetime limit, just annual limits, but this is nice to have. You could rebalance your portfolio in retirement, or shift to income producing investments, etc.

[mikele3]

definitively not day trading, but I am pleased by the idea that one could sell a position and be able to buy back something else into NISA... I never realized that.

It hasn't been possible so far. This is a new function of the new NISA account. I would prefer to have no lifetime limit, just annual limits, but this is nice to have. You could rebalance your portfolio in retirement, or shift to income producing investments, etc.

Gotcha. I welcome that and the increased limits... this might not even be the last upgrade to NISA we'll see in our lifetime.